Crash Hysteria Grips Trans-Atlantic Media: LaRouche's July Forecast Echoed Broadly

The trans-Atlantic English-language media is gripped with hysteria over the fact that the entire system is coming down. While no one is explicitly citing Lyndon LaRouche's latest forecast of a June-July chain-reaction collapse-point, the echoes of LaRouche's widely circulating assessments are all over the major news outlets, just days into the July, new fiscal year for most U.S. states.

For starters, longtime LaRouche watcher Ambrose Evans-Pritchard ran a pair of Daily Telegraph stories over the July 4th weekend, detailing the systemic collapse. Under the banner headline "With the US trapped in depression, this really is starting to feel like 1932," Pritchard ran through the collapse of home sales, the fall-off of factory orders, the out-of-control unemployment crisis, the bankruptcy of California and Illinois, etc. "Roughly a million Americans have dropped out of the jobs market altogether over the past two months," he wrote. "That is the only reason why the headline unemployment rate is not exploding to a post-war high. Let us be honest. The US is still trapped in depression a full 18 months into zero interest rates, quantitative easing (QE), and fiscal stimulus that has pushed the budget deficit above 10pc of GDP."

In a piece today, Pritchard mocked the so-called "stress tests" now being done on Europe's 100 biggest banks, quoting from an interview he conducted with Jacques Cailloux, the chief European economist and the Royal Bank of Scotland. Cailloux warned that unless the stress tests presume a 50-percent writedown of Greek debt and a 30-percent writedown of Spanish debt, at a minimum, it will be worse than a joke. "Markets are no longer willing to take on exposure to some 2 trillion euro of household and company debt in Spain, and this gap cannot be plugged for much longer by three-month loans from the European Central Bank," Pritchard quoted Cailloux. "If by the end of the summer we have not had much more aggressive policy action, we're back to contagion."

The Financial Times today was hysterical over the prospect of scores of municipal bankruptcies in the US, citing a Credit Suisse Securities study, warning about municipal defaults in California, Illinois, Michigan, and New York at any moment.

CNBC posted a dire warning that "Italy is the Ticking Time Bomb," citing Roger Bootle of Capital Economics, who warned of a possible Italian debt default, which could blow out the entire European banking system. "If the Government were to default on its debts and investors were forced to take a large haircut of say 50 percent, this would wipe out around 80 percent of Italian banks' tier one capital at a stroke, causing domestic financial market meltdown. Uncertainty about exactly which banks were worst affected would almost certainly lead to the seizing up of interbank lending markets and could prompt another deep global recession."

Mort Zuckerman, the publisher of the New York Daily News and U.S. News & World Report, zeroed in on President Obama, writing that the President is "barely treading water," because he is clueless about how to create jobs. "The fundamental problem is starkly simple: jobs and the deepening fear among the public that the American dream is vanishing before their eyes... It is clear that the magical moment of Obama's campaign conveyed a spell that is now broken in the context of the growing public disillusionment. Obama's rise has been spectacular, but so too has been his fall."

Clearly, the early July conjuncture, that LaRouche identified, has hit in a way that cannot be ignored, by anyone with even a slight connection to reality.